If we just KEEP talking about it, then nothing’s going to happen.
Start-ups and small companies are still unable to reward loyal and hardworking employees with share options due to the restrictive nature of the Irish Government’s flagship Key Employee Engagement Programme (KEEP).
Launched in last year’s Budget 2018, there are rumblings that KEEP has failed to recognise the benefits of employee share ownership for the Irish economy.
‘They have done this for large global entities but continuously fail to look after their own indigenous enterprises’
– GILL BRENNAN
“Across the globe, there is overwhelming evidence showing that companies which are part or fully owned by their employees are more productive, more profitable and more valuable,” said Gill Brennan, head of the Irish ProShare Association (IPSA).
“Yet, despite SMEs comprising 99.8pc of the Irish economy and employing 69.1pc of the working population, successive governments have failed to support the long-term viability and sustainability of growing SMEs by encouraging this business model.”
Brennan was speaking ahead of the annual Employee Share Ownership Day (ESOD) 2018, which takes place at Google’s international headquarters in Dublin tomorrow (21 June).
“The Key Employee Engagement Programme was meant to address this. It was heralded as an affordable, Revenue-approved scheme for start-ups and SMEs who want to reward their workers’ efforts and loyalty through employee share ownership. But there remain far too many restrictive exclusions in KEEP, most notably for companies in the fintech sector, and few companies have expressed an interest in implementing the scheme.”
If it is too narrow in focus, you can KEEP it
Brennan said that under the current system, many SMEs cannot easily participate in share ownership schemes due to the complexity of implementing them and the cost of entry.
She said she believes there is a willingness among the business community to recognise and reward their employees for their contribution, but they cannot do so presently.
“If businesses are given the conditions to flourish, underpinned and supported by Government in a mutually supportive contract, these same businesses will assume a wider responsibility to all stakeholders, employees, customers, suppliers and communities. Sometimes, public money has to be spent for public good and for the overall good for society and economy.
“We are calling on the Government to look at the evidence and to stop overcomplicating what should be a simple tax regime that is there to assist and encourage participation instead of creating barriers.
“They have done this for large global entities but continuously fail to look after their own indigenous enterprises.”
IPSA recently submitted its recommendations for changes to the KEEP scheme, addressing concerns that it is too narrow in focus and excludes many of the companies it should be supporting.
Brennan said the Government needs to listen to both Irish and international experts if it wants workers, companies and the overall economy to benefit from employee share ownership.